The Effect of Non-financial Information about Intellectual Capital on the Financial Performance of Non-profit Companies: An Impact Accounting Perspective

This chapter intends to shed light on the role of intellectual capital (IC) in the nonprofit sector, which emerges as an under-investigated research area within the IC studies. According to the literature (Kong, The strategic importance of intellectual capital in the non-profit sector. Journal of Intellectual Capital, 8 (4), 721–731, 2007; The development of strategic management in the non-profit context: Intellectual capital in social service non-profit organisations. International Journal of Management Reviews, 10 (3), 281–299, 2008), we identify the three components of IC (human capital, structural capital, relational capital) in order to determine the sub-components to be measured via key performance indicators (KPIs) (Bontis et al., Intellectual capital and financial performance in social cooperative enterprises. Journal of Intellectual Capital, 19 (4), 712–731. https://doi.org/10.1108/JIC-03-2017-0049, 2018). A principal component analysis has been applied and then a regression model has tested the significance of a relationship between the IC sub-components and the financial performance of non-profit organizations (NPOs). Results show that two human capital sub-components (training, value added) and one structural capital sub-component (services) affect the return on assets (ROA). Further studies should be conducted with larger samples and geographic areas covered in order to generalize these findings.